The US Federal Open Markets Committee will meet next week to determine whether or not to hike interest rates for a fourth time in this cycle. The market is pricing it in as a near certainty, which would take the Fed Funds rate (equivalent to the cash rate) to 1.25 per cent.
Despite the most recent jobs report being a little weaker than expected, the US economy has enough upside at the moment for the Fed to continue to slowly hike interest rates while still allowing the economy to expand at a solid pace. While inflation and wages growth are well contained, both have increased at a moderate pace over the past year or two which is good news for the economy but also the vital aspects of whether there will be yet more rate hikes in the months ahead.
